Elliott Funding Administration is searching for seats on the board of oil refiner Phillips 66, the newest effort in a multi-year marketing campaign pushing the corporate to promote belongings, enhance operational efficiency and bolster board oversight.
Phillips 66 obtained a discover from Elliott that the activist investor plans to appoint board candidates on the firm’s annual assembly, the refiner stated Wednesday in a submitting. Elliott may also request that the board maintain annual elections for administrators. Phillips 66 stated the board will assessment the discover.
Elliott, which started urgent for modifications at Phillips 66 in 2023, stated earlier this month that it’s now one among Phillips 66’s high 5 traders and believes the corporate hasn’t adopted by way of on guarantees to enhance operations. The fund, managed by billionaire Paul Singer, needs the corporate to streamline its enterprise and set extra bold refining targets.
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The third-largest US refiner by capability is already present process a multi-year cost-cutting initiative concentrating on $3 billion in asset gross sales. However Elliott needs the corporate to divest its pipeline enterprise, do the identical for its 50% possession of petrochemicals three way partnership Chevron Phillips Chemical and finalize a plan to promote European retail belongings that function underneath the JET model.
Elliott has stated that by promoting its pipeline unit, Phillips 66 may “command a premium valuation in extra of $40 billion.”
The activist investor has lately pushed a number of refiners to separate their retail, refining and midstream belongings to deal with their core enterprise of turning oil into gasoline. Marathon Petroleum offered its 3,900-store Speedway gasoline stations in 2019 for $21 billion following activist engagement by Elliott.
In a February presentation, the hedge fund known as for Phillips 66 to observe what it calls the “Marathon Path”. Canadian oil firm Suncor Vitality Inc., which operates refineries in Canada and the US, didn’t promote its retail community after an activist marketing campaign from Elliott in 2022, however the firm agreed to nominate new administrators.
Phillips 66, since Elliott’s marketing campaign started in 2023, has proven little want to turn into the type of firm Elliott needs. The refiner introduced a $2.2 billion acquisition of pure gasoline pipeline belongings in January.
“We consider we will create extra shareholder worth by maintaining the midstream enterprise built-in with our refining and our pure gasoline liquids midstream enterprise out to the petrochemicals enterprise,” CEO Mark Lashier stated on a January earnings name.
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